California's $141 mil lotto winner FINALLY came forward

[MrBaseball]

Just saw it on the news, he chose the cash option. In other words, he gets $70 million bucks in CASH within the next 6 weeks.

$141 million - tax = $70 million??
Taxes really suck!

[RayH]

You have to understand that there never was any $141 million. $141 is the total pay out over 26 years. That is, they take a sum of money, invest it, and give out an annual payment.

[Spanky]

Interesting , Yeah I always heard that in the states if you win and take cash you just get less, I don't see why he wanted it all right away though? I Guess one big chunk of money would be cool but I would be fine with the yearly sum, I'm sure you could get a loan from someone if you wanted a large sum for a project or 3.

[MiKe85]

I wonder why he didn't come forward sooner?

[Warthog]

I'd take the yearly!!!

$144m/26 =
$5.4 million each year!

or with taxes out...
$70m/26 =
$2.6 million each year!

You never have to hold a steady job the rest of your life! EVER!

Most likely that guy will spend all or most of his money within 5 years or so on stupid things like, say, a custom car made of titanium or a computer made of bottle caps.
http://www.sysopt.com/forum/smile.gif
Warthog

[This message has been edited by Warthog (edited 06-29-2001).]

[Spanky]

MMM... a custom car out of titanium eh?

Well throw in some carbon fiber/graphite, maybe some stainless steel and a little ceramic and you have a deal. http://www.sysopt.com/forum/smile.gif

Personally I would be buying my own airfeild and a gaggle of ww2 vintage fighter planes.

Ah that would be the sweet life, heck I would be happy with one homebuilt replica, thats what I have my sights set on.

[Toadman]

I'd take the lump sum. I know I could invest it better than the state government ever could. Besides who knows what the future holds? And btw, the guy who won is a 66-year old who needs an interpreter to speak to the media.

[MrBaseball]

The guy never checked his ticket untill yesterday and he realized he won. I'd rather take all the money at once.

First off, you have the money in your possession to spend it all if you want.

Second, do you have any idea how much that money will make if they put it in a bank and let it rack up intrest??? a LOT!

Third, you can say you have $70 million bucks instead of saying I have $2.6 million after the first year.

Warthog, your right, $2.6 million a yesr isn't THAT bad http://www.sysopt.com/forum/smile.gif I guess I'd be happy either way.

Oh yeah, the guy that one is retired! What a great time to win the lotto eh?

[JacobM5727]

personally i would take the cash, buy a nice .5 million dollar house and my 100,000 dollar nissan skyline, another car, like a jetta for everyday driving. maybe 10,000 in furnishings... probably invest like 20,000 thats only like 660,000

i would still have like 70 million......

i could put myself on a 60,000 dollar a year budget for 1000 years (like i would live that long )........ also i could get my mom and my aunt and my grandpa .5 million dollar houses but thats only 1.5 million.. so i guess i would have the time of my life and give the rest to my future kids in a will when i die i also would travel

[MrBaseball]

$70 million... would take care of about 25 generations in my family. They'd be taken care of until the year 6000 http://www.sysopt.com/forum/smile.gif I really doubt I'd spend hardly any of that money. My family, for the next 25 generations would come first.

[Ed_S]

I guess I'm a little weird since I doubt I'd touch it or quit working. Just bank or invest it. I'll bet my broker would like me much better, though! But buying things... don't know what!
To me, it would represent security & freedom. Just knowing that I could quit at will would be great, and it would actually be fun to work with everyone knowing you could walk anytime.

But I'd most likely take the cash option since I really don't expect to be around for that long. And I wouldn't trust the gov. to do their part anyway. Who's to say they won't default on the payments in some unforseen future emergency??

Also, don't forget the interest factor. $70M invested halfway decently will far exceed $141M long before 26 years have passed!!

[alondra]

the california lottery is the biggers scam going, If the mafia ran it the govt would want them in jail, infact the change to the mega number bit made it even worse,
this guy won 141 million over 20 plus years or 70 mil now, after taxes will get about 40 mil.
think how many weeks and hundreds of millions of dollars went into tickets and no winner. Ive tried to get a couple questions answered with no result, is the money in an escro account, if so where is it invested, and by whome, and at what fees, or are all the already won payments come from future sales, if so what happens if the lottery folds, state in debt for it??? where is the money the schools were suposed to get, is there ever an audit, made, or published, how much is the overhead and who gets how much. questions, questions, http://www.sysopt.com/forum/frown.gif http://www.sysopt.com/forum/frown.gif

[challenger]

I'd take the yearly pay out. But I'm with spanky on his way to spend. That's exactly what I would do. Hey Spanky ever fly in a WWII aircraft? Oldest plane I've flown personally was a 1942 Stearman Bi-plane. Best time I think I've ever had and it beats the hell out of Cessnas and Pipers.

Challenger

[MiKe85]

I'd take the lump sum, and then roll the dice with the stock market. http://www.sysopt.com/forum/wink.gif

[RalphArch]

The lottery folks don't care - they are spending $70 million in either case to purchase an annuity that will pay 144/26 annually for the next 26 years.

The winner will have to pay taxes on the $70 million this year - so he will only have maybe $35 million after taxes (state and fed)

Assuming that taxes will still run the same 50% on the string of payments; his 5.4 per year will be 2.7 after taxes

The present value of a 26 year string of 2.7M payments of at an opportunity cost of 6% is the same ($35.11). So these are pretty equivalent, after taxes.

He could invest in something that beats 6% opportunity cost; but he also could invest in a riskier option and lose or a safer and be worse off. With the money in hand as others have noted, he can obviously splurge today and thats probably what he will do.

A big factor is what happens to the annuity on his death - if it passes to beneficiaries as it should then its still a wash. If it stops then obviously he should take cash and invest.